Ciena Closes Nortel Metro Ethernet Carrier Acquisition

Ciena announces a new converged portfolio strategy as it closes $774 million acquisition of bankrupt Nortel's Metro Ethernet Networks business.

By Sean Michael Kerner | Posted Mar 22, 2010
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Networking vendor Ciena has now formally closed the deal to acquire the optical networking and carrier Ethernet technology of Nortel's Metro Ethernet Networks (MEN) business for a total purchase price of approximately $774 million.

The deal's closure marks the end of a nearly six-month process in which Ciena has been in the hunt for Nortel's assets as it assumes a new position in the carrier networking industry.

Nortel entered into bankruptcy in January 2009, and has spent much of the past year selling off its various divisions. Ciena first bid on the Nortel carrier assets in October, and formally won the auction for the business at the end of November.

Ciena is now moving forward as a combined entity with Nortel's MEN and aims to be a major player in the carrier marketplace.

"Ciena's competitive position in the market has been significantly improved with the Nortel MEN acquisition," Dave Parks, director of product marketing at Ciena, told InternetNews.com. "We are big enough to execute but not too general like some of our larger competitors to lose focus. Ciena now holds the number one optical networking market share position in North America and number three position globally."

Parks added that Ciena is now positioned to be a market leader in optical switching and is emerging as a heavyweight in carrier Ethernet. Nortel had been working on 100 gigabit networking technologies, and already has trials of its solution with Verizon.

Ciena is planning to rebrand the existing Nortel MEN platforms with its own logo over time, though Parks said that the company isn't planning to rename any of the Nortel MEN products. Existing products are not being phased out unless they were already discontinued prior to the acquisition, he added.

"We will be leveraging key capabilities and technologies from both traditional Ciena and Nortel MEN and applying those across the portfolio where it makes sense," Parks said. "Some examples of this include adding Nortel MEN's 100G technology to other Ciena products and Ciena's control plane software to other Nortel MEN products."

Ciena will continue to support current Nortel customers, and all products that are currently shipping to customers will have continuity of supply and support, he said.

"In fact, many of Nortel MEN's products and capabilities are key components of our going-forward portfolio and strategy," Parks said. "We've organized our combined portfolio around solutions based on converged optical Ethernet by leveraging key tools and technology attributes in several areas that help our customers make their networks higher capacity, converged and automated."

The optical networking and carrier Ethernet business is the last of Nortel's major divisions to be liquidated by the bankrupt company as it now winds down its operations. Nortel previously sold its wireless assets to Ericsson for bid of $1.13 billion. Nortel sold its enterprise assets to Avaya for $900 million.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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